Health & Welfare Plans Newsletter

August 31, 2015

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Employee Benefits Jobs

Retirement Plan Administrator
TPA Firm
in MO

Benefit Consultant
USI Northeast
in NJ, NY

Retirement Plan TPA Account Manager - Part Time
Norton Financial Services
in ME

IRT Relationship Manager 3
Wells Fargo
in VA

Account Manager
BenTek
in FL

Employee Benefits/ERISA Attorney
Barclay Damon, LLP
in NY

Insurance Specialist
The Newport Group
in NC

Plan Administrator, Compliance
Verisight
in IL, MD

Team Lead, Client Services
Verisight
in CA

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Webcasts and Conferences

Affordable Care Act Workshop
September 1, 2015 in MO
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Understanding Your Fiduciary Responsibilities under ERISA Workshop
September 2, 2015 in MO
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Analysis of the Final ACA Employer Reporting Forms for 2015
September 17, 2015 WEBCAST
(Littler Mendelson)

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[Official Guidance]

Text of IRS Proposed Regs: Minimum Value of Eligible Employer-Sponsored Health Plans
"This document withdraws, in part, a notice of proposed rulemaking published on May 3, 2013 ... and replaces the withdrawn portion with new proposed regulations providing guidance on determining whether health coverage under an eligible employer-sponsored plan provides minimum value.... [T]hese proposed regulations incorporate the substance of the rule in the HHS regulations. They provide that an eligible employer-sponsored plan provides minimum value only if the plan's share of the total allowed costs of benefits provided to an employee is at least 60 percent and the plan provides substantial coverage of inpatient hospital and physician services. Comments are requested on rules for determining whether a plan provides 'substantial coverage' of inpatient hospital and physician services.... These regulations are proposed to apply for plan years beginning after November 3, 2014. However, for purposes of section 4980H(b), the changes to the minimum value regulations ... do not apply before the end of the plan year beginning no later than March 1, 2015 to a plan that fails to provide substantial coverage for in-patient hospitalization services or for physician services (or both), provided that the employer had entered into a binding written commitment to adopt the noncompliant plan terms, or had begun enrolling employees in the plan with noncompliant plan terms, before November 4, 2014." (Internal Revenue Service [IRS])  


[Advert.]

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[Official Guidance]

Text of CMS Emergency Request for OMB Approval of MLR Data Submission Requirements
"Based on CMS's identification of more significant data discrepancies than previously anticipated, we are requesting an emergency revision to the risk corridors data validation information collection requirement. We are requiring all companies with QHP issuers to complete a checklist to attest that their submission complied with critical guidelines for risk corridors and MLR data submission. For companies with issuers whose reported claims or premium amounts for risk corridors and MLR differ from data collected for other premium stabilization programs by a greater magnitude than expected, CMS is requiring that issuers quantify these differences, and provide a written explanation of the magnitude of the discrepancy. We require these descriptions to be approved by an actuary.... We are requesting OMB review and approval of this collection by September 4, 2015, with a 180-day approval period. Written comments and recommendations will be considered from the public if received by [September 3, 2015]." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

[Guidance Overview]

IRS Private Letter Rulings Address Handling of VEBA Assets by Employers
"An employer sought to amend its VEBA trust agreement -- under which assets could be used exclusively to fund retiree health plan benefits -- to provide that a portion of the assets would be segregated to fund benefits under the employer's active employee health plan.... The IRS reasoned that because Section 501(c)(9) permits VEBAs to pay active employee health benefits, the proposed amendment would not be an impermissible inurement." (Thomson Reuters / EBIA)  

[Guidance Overview]

IRS Private Letter Ruling Confirms Tax Treatment of Employer-Provided Annual Transit Passes
"The employer (in this case, a city government) represented that it purchases annual Smart Cards from the local transit authority for each of its employees. Each card, which may be used during the calendar year for transportation on the transit authority's bus and rapid transit systems and cannot be used for any other purpose, includes a photo of the employee and cannot be transferred to another individual. The card is deactivated upon an employee's termination of employment.... [T]he IRS ruled that the Smart Cards are considered transit passes within the meaning of Code Section 132(f) and that employees may exclude the card's monthly fair market value from income, up to the statutory monthly limit." (Thomson Reuters / EBIA)  

Fired Employee's FMLA Win Affirmed on Liability But $160k Award Vacated for Jury Trial on Damages
"Although the Eighth Circuit affirmed summary judgment for an employee as to liability on her FMLA entitlement and retaliation claims, in which she alleged that she was terminated after giving her employer notice of her need for a reduced schedule during her pregnancy, the court vacated and remanded the award of $49,769 in back pay, $30,876 in pre-judgment interest on the back pay, and $80,645 in liquidated damages.... [T]he Eighth Circuit observed that a jury should have determined whether the employee mitigated damages (and to what extent) and whether the employer acted in bad faith." [Wages v. Stuart Management Corp., No.14-2793 (8th Cir. Aug. 10, 2015)] (Wolters Kluwer Law & Business)  

Seeking to Avoid Community Rating Under Health Care Reform, Health Benefit Trusts Failed to Provide Sufficient Proof of 'Bona Fide Association' Status
"The court's application of the 'commonality' test in this case illustrates the difficulty in satisfying the standard, especially for employer groups or associations that appear to be mere marketing organizations or interest group forums. But even for legitimate associations, this court imposes a demanding standard, requiring a showing of how employers participate in activities of the association beyond provision of benefits to employees." [Associated Industries Mgmt. Serv. v. Moda Health Plan, Inc., No. No. 3:14-cv-01711 (D. Or. July 16, 2015)] (Thomson Reuters / EBIA)  

Changing Health Behavior: Engaging Employees as Consumers (PDF)
"In order to positively impact workforce health and reduce costs, employers must move their health programs beyond words to a state of consumer engagement and action. This article summarizes relevant concepts and findings from the fields of psychology, decision research, and social marketing and identifies best practices in developing consumer engagement. Employers can utilize this information when creating health care programs and tools to control costs and improve workforce health and productivity." (Buck Consultants at Xerox)  

Narrower Doctor Choices Coming for Group Health Plans
"Plans must narrow networks, researchers say, because insurers can no longer deny people coverage due to pre-existing conditions and must cover certain essential health benefits. While this means Americans are no longer discriminated against when it comes to buying health care coverage, it can lead to higher costs if they want a large number of doctor and hospital choices." (Forbes)  

The Problem with Proposed Sales of Health Insurance Across State Lines
"The trouble with the idea is that varying or numerous state regulations aren't the main reason insurance markets tend to be uncompetitive. Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits. It also involves setting up favorable contracts with doctors and hospitals so that your customers will be able to access health care. Establishing those networks of health care providers can be hard for new market entrants." (The New York Times; subscription may be required)  

Has Faster Growth in Health Care Spending Returned?
"Recent data show 2014 GDP growth is expected to be 3.9 percent. Thus, there does not yet appear to be evidence of an underlying spike in health spending; such a spike may still occur but most of the recent bump can be explained by the ACA coverage expansion." (Robert Wood Johnson Foundation)  

[Opinion]

The Big Box Retailers in Health Care: Hospitals
"[W]hy does everything cost more in a big box hospital? It's not because of hospitals have high overhead (Home Depot has high overhead). It's due to the lack of competition. Ninety-seven percent of hospital bills are paid for by third-parties, so hospitals don't have to compete on price." (National Center for Policy Analysis Health Policy Blog)  

Benefits in General; Executive Compensation

Third Circuit Requires Benefit Denial Letters to Contain Plan Limitations Period
"As a possible silver lining, the Third Circuit stopped short of requiring the inclusion of the limitations period for the most analogous state law claim. It noted that, while the issue was not before the court, such a requirement would require legal research into various state law for each claim and would potentially result in the administrator providing legal advice to claimants." [Mirza v. Ins. Admin. of America, Inc., No. 13-3535 (3d Cir. Aug. 26, 2015)] (Seyfarth Shaw LLP)  

Third Circuit Says ERISA Administrative Appeal Denial Letters Must State Plan-Imposed Time Limits
"Given that three circuits already have ruled consistently on these issues, plan fiduciaries should make sure that administrative appeal denial letters specifically set forth plan-imposed time limits. Furthermore, given the courts' tendency not to penalize participants for failure to consult SPDs and plan documents when pursuing a claim for benefits, plan sponsors and administrators should consider whether there is other information pertinent to the claims process to which they should affirmatively alert participants when determining claims for benefits." (Proskauer's ERISA Practice Center)  

When Does ERISA Apply to Small Business Owner Benefit Plans?
"The court noted that for the ERISA exemption to apply, the corporation would need to have been owned by one person and his or her spouse. In this particular situation, however, the plaintiff owned the company along with two others, so the ERISA exemption did not apply." [Silverman v. Unum Group, No. 14-CV-6439 (S.D.N.Y. July 30, 2015)] (DeBofsky & Associates, PC)  

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